Can Microsoft Corporation (NASDAQ:MSFT) Provide Long-Term Value to Investors?

Microsoft Corporation (NASDAQ:MSFT) is one of the few technology companies that has led its industry from its founding in 1975 up to date. The company dominates the PC-Compatible operating software market and is one of the most valuable companies in the world.

The company continues to innovate on a daily basis as its releases new versions of its Windows operating system and its range of applications under the Microsoft Office suite. The company has also diversified into other technology initiatives such as its smart phone operating system, its Azure cloud services, and even artificial intelligence applications.

The company recently announced that it was collaborating with Baidu Inc (ADR) (NASDAQ:BIDU) in launching the self-driving platform aptly named Apollo. This new venture puts Microsoft in direct competition with Alphabet Inc (NASDAQ:GOOG), which has also invested heavily in self-driving cars.

Currently, Google has won the battle for the smart phone operating systems as its Android OS is used more widely than Microsoft’s Windows OS for smart phones. Microsoft has not yet gained a significant portion of the smart phone devices market despite acquiring Nokia a few years back.

Microsoft performed excellently under Bill Gate’s leadership and later under Steve Ballmer’s leadership. However, in February 2014, the company announced Satya Nadella as its new CEO after Steve Ballmer stepped down.

Nadella had proven himself by transforming Microsoft services and operations, especially its Azure cloud services. Under his leadership, Microsoft’s cloud services revenues grew from $26.6 billion in 2011, when he took over, to $20.3 billion in 2013, just two years later.

However, there is controversy surrounding Nadella’s pay given that he was set to earn $91 million at the beginning of his 7-year contract, a figure that could balloon to $300 million by the end of his tenure. Many industry analysts agree that this is a colossal sum with the consensus being that Nadella might be overpaid.

So far, Nadella has delivered excellent results for Microsoft investors, but the question remains whether this will continue for the rest of his tenure.

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